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Why You Should Consider Renewable Energy To Power Your Business

Can your business afford the 33% electricity hike that Eskom is proposing? If not, you should look into some of the renewable energy options South Africa has to offer.

Nicole Crampton

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Types of alternative energy

Before you can make the switch, you should know more about what alternative energy sources South Africa has to offer. Here are 6 renewable energy alternatives you can choose from to make your business more sustainable and environmentally conscious.

1. Solar Power

solar-power-south-africa

Solar power is probably one of the most well-known forms of alternative and renewable energy. When deciding whether or not to buy solar panels for your business, consider what your power demands are.

“By assessing where you consume energy, and for how long you would need to operate for, you can assess your daily power requirement. Once you have this, you can calculate what capacity your business requires,” advises Gillespie. “Solar panels come in a variety of quality and efficiencies, but a reputable solar panel brand should have a reasonable efficiency and lifespan.”

For example

If a small business wanted to set-up a small grid-tied solar system of around 3kW. your total solar power expected would be around 21kWh of usable power per day. Compared to 2014 FIT (Feed in tariff) rates, you can save as much as 144.4% over a payback period of 8.6 years, according to this report.

“If you had to go off the grid completely, you could save even more with an even shorter payback period, as you would have no feed in tariff to worry about. The only cost would be the initial expense of buying the solar panels,” explains Gillespie.

Going off the grid

There are a few more details you’ll need to take into consideration if you decide to take your business off the grid. “You will need to store excess energy for night time power demand such as batteries. Storage capacity will then need to be calculated based on the night time power demand, and maximum storage capability on the selected battery type,” advises Gillespie.

Keeping in mind that you don’t want to find yourself without power, consider a built in contingency option when calculating your demand. This will ensure you continue to have power even on days when the sun isn’t shining or when it shines less during winter.

What type of business can use solar?

Solar power is versatile and you can use it in numerous types of businesses. Unless you’re going to take the solar panels and infrastructure with you when you leave, it’s best to install this on a property that you own.

2. Biomass

biomass-alternative-energy-source

Biomass alternative energy source is a fuel developed from organic materials. This is a renewable and sustainable source of energy that is made from:

  • Scrap lumber
  • Forest debris
  • Crops
  • Manure
  • Types of waste residues.

Although this is a renewable energy source, it will only be a viable option for a niche market. If you have a constant supply of waste, from construction and demolition activities to surplus wood from papermaking or even municipal solid waste, you could create green energy production.

How does waste become energy?

In a biomass power plant, waste is burned to produce steam, which runs a turbine that generates electricity. The advances of technology have enabled the emissions from burning biomass to be less than emissions created when burning fossil fuels.

“Biomass energy is renewable but still quite expensive with no real large scale plants in operation in SA,” explains Gillespie. “I don’t think it will be practical for a business to install a gasifier in their backyard, but it is feasible. This option is only profitable for a large scale business.”

What type of business can use biomass?

As this is only feasible on a large scale, this renewable energy could work for an industrial size business that has a constant supply of waste from activities such as construction and demolition, along with surplus wood used in paper-making or even municipal solid waste.

Related: Pele Green Energy: Boipelo Moloabi

3. Wind energy  

wind-energy

Wind power captures the energy created by wind and converts it into mechanical energy, which is then turned into electricity. The same concept is seen in the Windmill that would use the power of the wind to pump water and ground grain.

Although wind energy is one of the fastest growing energy sources there are also challenges, which you would need to keep in mind when considering it as one of your alternative energy sources. This renewable energy is environmentally friendly and sustainable, but it does require a large investment.

Will wind energy work for your business?

Unless you have a large business, which requires a large amount of constant energy, this might not be the renewable energy source for you. “Only profitable businesses in large scale operations would benefit from wind energy when considering the substantial cost involved,” explains Gillespie.

“It is quite impractical to consider installing this for small businesses as the initial costs are quite high. Unless you have a lot of capital or a need to produce power at a time other than daytime, which is of course the only time when solar is effective.”

What type of business can use wind energy?

If you’re an industrial size business on a large property in a particularly windy section of South Africa, then using wind as an alternative energy source could be for you.

4. Hydrogen and Fuel cell

hydrogen-and-fuel-cell

An up-and-coming form of renewable energy is the process of converting wind/solar/ hydro power into hydrogen gas, which is then stored in a battery.

“Your energy capacity is therefore defined by how much hydrogen you can store. You would then use this stored hydrogen in a fuel cell, when united with an appropriate catalyst the hydrogen recombines with atmospheric oxygen to form water, and in doing so, it is able to generate an external DC current,” explains Gillespie.

Is this a viable alternative energy source for your business?

In an effort to develop safe, clean and reliable alternative energy, numerous businesses are concentrating time and effort on improving the current hydrogen economy. “Fuel cells are becoming affordable, more so than their production alternatives,” says Gillespie.

The limitations, when it comes to this renewable energy source, is the production of hydrogen from green sources, and that hydrogen is actually extremely difficult to handle and store. “The atom is so small it has the ability to penetrate between metal atoms and slowly weaken the structural integrity of steel storage vessels,” explains Gillespie.

Although this is one of the newer renewable energy options, scientists and engineers are working tirelessly to make it more affordable and accessible. At this stage hydrogen electrolysis is only really profitable on a larger scale. “This method is not really profitable at the moment for a business use case. It is really only suitable for grid feed, grid balancing and industrial use,” advises Gillespie.

What type of business can use hydrogen and fuel cell energy?

If you’re an industrial sized business, or a production plant, you could benefit from supplementing your energy requirements with hydrogen and fuel cell energy.

5. Hydroelectric energy

hydroelectric-energy

Hydroelectric energy takes advantage of gravity and the water cycle to generate renewable energy. The water spins a turbine, which in turn rotates a generator creating electricity. For example, four litres of water per second falling one hundred feet can generate one kilowatt of electricity, according to the Union of Concerned Scientists.

Although this is a renewable energy, this would only be feasible for very large businesses that had access to a controllable moving body of water. South Africa has several hydroelectric projects operating around the country, which feed power straight into the grid.

“From a business standpoint the initial cost, and limited operational costs, make it an affordable form of renewable energy but not as affordable as coal or solar,” explains Gillespie.

Related: Entrepreneurial Duo Solves Electricity Problems In Rural Communities

6. Geothermic energy

geothermal-map-south-africa

Illustration: TAUFEEQ DHANSAY

Geothermic energy is heat within the earth that you can convert into electricity. There are naturally occurring geothermal reservoirs of hydrothermal resources where you can access this heat energy. The largest geothermic resources are typically found along major tectonic plate boundaries, but South Africa does have a few pockets around the country.

Environmental issues related to geothermic energy? 

Although this is a renewable energy, there are some environmental concerns that have given it a controversial reputation. By extracting geothermic energy, greenhouse gases are released, although the amount of gas is significantly lower than fossil fuel energy options.

Newer technology uses the method of hydraulic fracturing, also known as fracking. The process has been known to cause tremors and earthquakes. Another concern is the pollution of rivers and groundwater, as excess water from the process is often introduced to lakes and rivers, which could damage ecosystems.

There is also a possibility of depleting the geothermal resource from a particular area, and the initial cost can be quite high.

What type of business can use geothermic energy?

Although internationally the technology exists to power a single building using technology, it isn’t mainstream in South Africa yet. You can supplement your power supply by using geothermic energy to power your business if you’re located in a favourable area and own your premises. The infrastructure is costly, but can reduce your electricity expenses making the investment worth your while.

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Nicole Crampton is an online writer for Entrepreneur Magazine. She has studied a BA Journalism at Monash South Africa. Nicole has also completed several courses in writing and online marketing.

How to Guides

Why You Should Trademark Your Cannabis

Brand owners take note. The movement to legalise the possession and consumption of cannabis is real. With the growing global trend to recognise cannabis as legal it can only be a matter of time until various other cannabis products will be legalised too.

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Canada is the first G-7 country allowing the legal consumption of recreational cannabis having passed the Cannabis Act on 21 June 2018 regulating the growth, distribution and sale of recreational cannabis in Canada.

Although the USA still regards the use and sale of cannabis as illegal under Federal Law, with nine states and Washington DC permitting the recreational use of cannabis, absolute prohibition in those states has effectively stopped.  Benefits shown by the use of medical marijuana is a large contributor to this change.

In September 2018, the South African Constitutional Court ruled that certain provisions of the Drugs and Drug Trafficking Act and the Medicines and Related Substances Act are unconstitutional as they infringe upon the right to Privacy in terms of Section 14 of the Constitution. An adult may now possess and use cannabis in private for personal consumption in South Africa.

The opportunities to create new brands for cannabis-based products are endless and so too should the requisite protection of intellectual property protection be in place in the territories and, in respect of trade marks, classes of relevance.

Related: How Schindlers Attorneys Became Involved In The Landmark Cannabis Case

Earlier this year nearly 1,700 trade mark applications and registrations could be found on the Canadian Trade Mark Database covering cannabis. In June 2019 it is anticipated that the requirement for “use” to secure trade mark registration will be removed from the Canadian Trade Mark Law encouraging even more trade mark filings.

Regardless of the Territory, two principles should be kept in mind when choosing a trade mark:

  • The trade mark should not be contrary to public policy (contra bonos mores) or likely to give offence to any class of persons; and
  • A trade mark should not be descriptive of the kind of quality or other characteristics of the product.

Anyone looking to diversify into cannabis products would be well advised to identify their consumer, create their brand and file their trade marks before others do.

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How to Guides

How Brigid Prinsloo Made (A Lot Of) Money On Airbnb

With the explosive success of Airbnb, the property investment landscape is changing. An increasing number of property owners are finding that it’s far more lucrative to rent out a property by the night than to install a long-term tenant.

GG van Rooyen

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141-how-to-make-a-lot-of-money-on-airbnb

It is possible to build property riches starting from a small base. This couple shows you how they did it. They’ve also launched a business that makes it easier to rent your property on Airbnb.

Although Brigid Prinsloo is a dyed-in-the-wool Capetonian who absolutely loves the city, she isn’t spending a whole lot of time there right now.

Like many young people, she’s pulled up stakes and hit the road, determined to see the world. When Entrepreneur spoke to her via Skype, she was busy exploring Vietnam with her Fiancée.

But, unlike many people who finance their travels by selling their homes and possessions, Prinsloo hasn’t liquidated her assets.

Related: 10 Weird And Wonderful Airbnb Listings, Including A New York Taxi And An Igloo

Instead, she has done the opposite – she has invested in a couple of properties that she lists on Airbnb.

The income from these rentals is significant enough to not only cover their respective bonds, but to bankroll her travels as well.

How has she managed it? And, more importantly, is it something that others can accomplish as well? Entrepreneur asked her to reveal the secrets to making a killing on Airbnb.

1. Getting Started: Listing Your First Property on Airbnb

How did you start listing on Airbnb?

Brigid Prinsloo

Brigid Prinsloo – Superhost SA

I used Airbnb during a trip to London and Dublin, and the experience was a very positive one. When I got home, I decided to try being a host. My fiancé and I had a spare room in our flat, which had morphed into a dishevelled storage room.

Almost on a whim, we decided to try and rent it out on Airbnb. We had a very ‘Lean Start-up’ approach to the whole exercise. Our small room acted as a minimum viable product (MVP), we listed it simply as a way of gauging interest.

Well, within an hour of listing the room, we received our first inquiry. Within the first day, we had our first booking. We weren’t prepared.

We ended up moving our own comfy bed into the room, just to ensure our guest could enjoy a decent night’s sleep, and slept on a spare bed ourselves.

By the end of that first month, we had earned close to R10 000 by renting out the room. The rent for our entire two-bedroom flat was R10 500 per month. We realised that we could earn a tidy sum by renting out an entire flat.

My fiancée and I purchased a property that we now rent out, and I also purchased a second property with my dad and my sister, which we’ve also listed on Airbnb.

Resource: New Ways SMEs Can Find Funding

2. Return on Investment: Making Money on Airbnb

How much income can you expect to earn on your Airbnb property per month?

There are obviously loads of different kinds of listings on Airbnb – everything from cheap spare rooms to lavish mansions. Based on the investment we’ve made, though, I’m very happy with the return we’ve seen.

If you take the entire amount that my fiancée and I have earned from renting our flat out through Airbnb and divide that by the number of months that it’s been listed, the average monthly earning is about R23 000.

And this is a property that had been rented out to a long-term tenant for about R6 000 by a previous owner. What’s great about this sort of investment, of course, is that the income generated is fairly passive, which is why I can afford be in Vietnam while everything ticks over at home.

Airbnb-accomodation

High quality images are important when listing your property on Airbnb.

3. Birth of Superhost: An Airbnb Management Company

Is there an easy way to manage multiple Airbnb properties?

If you’re renting out one room – or even one flat – managing your rental is fairly easy. However, once you start listing a couple of properties, managing them can become quite a task.

For example, someone needs to welcome guests and hand over the keys, ensure that the flat is clean, and even take care of all the admin that goes with managing a listing on Airbnb.

superhostsouthafrica

Brigid Prinsloo has made far more by listing her property on Airbnb then she could ever earn through long-term rentals.

We started a service called Superhost SA, which assists Airbnb hosts in managing their listings. As the popularity of Airbnb has grown, companies focusing on offer management services have popped up in lots of major cities.

Resource: 10 Businesses You Can Start Part-Time

For around 17% of the revenue earned, a company like Superhost will assist with the nitty gritty of renting out a space on Airbnb.

4. Location, Location, Location? Which is Best for Airbnb Property Owners

How important is location when it comes to listing a property on Airbnb?

Location is important, there is no doubt about it. A lot of travellers will judge a listing by what is within walking distance of the space.

So it is worth trying to get hold of a property in a decent location, even if it means you might have to go for something a tad smaller.

That said, however, you’ll find that the listings on Airbnb in Cape Town are surprisingly spread out. Services such as Uber have made it easier for people to travel in foreign cities. So location is important, but you certainly don’t need to be situated in the very heart of town.

Airbnb-location

Airbnb guests look for listings that are affordable, centrally located and well-equipped.

5. How to Build An Airbnb Property Empire

Can you build real wealth through Airbnb listed properties?

Some people are using Airbnb to build empires, there’s no doubt about it. You find that some people in large cities like New York have massive Airbnb portfolios with 200 listings.

Airbnb is providing an interesting alternative to the traditional strategy of buying properties and renting them out to long-term tenants to pay them off. You can make far more money from Airbnb.

That said, Airbnb isn’t going to turn you into a multi-millionaire overnight. Building up a portfolio will take time.

We might be able to pay off the bond on our flat in four years instead of 20 thanks to Airbnb, for example, but it’s not a get-rich-quick scheme. It will still take time.

Another interesting way to potentially make money through Airbnb is to rent a property and list it on Airbnb. But you don’t want to do it illegally.

Related: Watch List: 11 Teen Entrepreneurs Who Have Launched Successful Businesses

Airbnb has had to deal with some backlash overseas because of tenants who were illegally subletting their flats. You need to be honest with the landlord and make sure that he or she is okay with it.

Airbnb-lounge

Want to attract the right kind of guests? Create a listing that is cosy and inviting, and adds some local flavour.

6. How to Make Your Listing Stand Out

How do you achieve and maintain a high occupancy on Airbnb?

A lot of people are noticing the income potential of being an Airbnb host. In fact, Cape Town alone now boasts close to 10 000 listings on the website. So how do you make your listing stand out? Here’s Brigid Prinsloo’s suggestions:

Airbnb-listing

Airbnb boasts millions of listings so it’s crucial to make your listings stand out. High quality images are important.

1. Create a pretty listing

Hide the laundry, flush the toilet and make the bed before you upload an image of your flat on Airbnb.

Not only should the flat you’re listing look clean, modern and inviting, but you should also make sure that you post excellent pictures of it online. It’s even worth making use of a professional photographer.

2. Undercut the competition

You might not be better, but you can certainly be cheaper. Undercutting the competition is a worthwhile strategy.

The more people have visited you, rated your place and commented on your service, the higher your listing will be placed on the website. This means that new hosts can find themselves languishing at the bottom of search results, far from the eyes of potential guests.

Prinsloo suggests listing your space just below the market standard (5 – 10% below). “Most people filter search results by price, so being slightly cheaper than the competition will help you get noticed,” she says.

3. Connectivity is important

Around 70% of South African Airbnb guests are from overseas.

While these people won’t be travelling thousands of kilometres to sit in a room and watch TV, they’ll probably still want access to DStv.

Wi-Fi is another must-have for those looking to share their ‘African experience’ on social media. And it better be fast and uncapped.

4. Be friendly and helpful

As mentioned, reviews are important on Airbnb. And if you want to receive a good review you need to provide a great experience.

“A lot of people are looking for that personal peer-to-peer experience. They don’t want to feel as if they’re living in someone else’s room with their clothes in the cupboard and toiletries in the bathroom, but they do appreciate that personal.

Being friendly and helpful goes a long way. If someone is from out of town, it’s a good idea to provide them with hints on where to go and what to do in the city,” says Prinsloo.   

5. Add personal touches

You’re not a hotel, but you can still try to make your space as cosy and inviting as well. A good way of doing this: Provide those nice-to-haves like soap, shampoo and great coffee.

Related: 10 Tips for Finding Seed Funding

Prinsloo always provides a couple of bottles of local wine as well.

7. The Risks of Listing a Property on Airbnb

What are the risks associated with listing a property on Airbnb?

1. Damages

Whenever you hand over the keys to your house and possessions to complete strangers, there is an element of risk involved. However, Airbnb tries to mitigate this risk by allowing hosts to vet guests (and vice versa) to an impressive degree.

Guests and hosts verify their IDs by connecting to their social networks and scanning their official ID document. Although there are some horror stories out there, listing needn’t be terribly risky.

You just need to try and make sure who you’re dealing with.

Air-bnb-property

Handing your valuable possessions over to strangers can be intimidating. It’s important to do everything you can to mitigate the risks.

2. Liability

What happens when a guest breaks a leg while descending your stairs, chops off a finger with your kitchen knife or shocks himself with your electric fence (foreigners aren’t as familiar with electric fencing as we are).

Related: Luthuli Capital Co-Founder’s Advice On How To Start When You Can’t Get Finance

We live in an increasingly litigious society, and should something go wrong, you could find yourself being threatened with a lawsuit. Because of this, it’s a good idea to ask guests to sign a waiver that absolves your from any culpability.

3. Squatting

It’s great when guests arrive, but what happens when they won’t leave?

Airbnb rental falls into a murky category of property rental that could see you deal with the same legal hassles as someone trying to get rid of squatting long-term tenants. Squatter’s rights can make this very difficult.

It is a good idea to consult a lawyer to help draft a contract that will offer some form of recourse in the event of squatting guests.

4. Regulations

Some body corporates and home-owners’ associations will be less than impressed with the prospect of total strangers coming and going from your property at all hours.

Related: How Kevin Hart Went From Being A Comedian To The Guy Who Owns Comedy

You need to ensure that other home owners don’t have problem with the listing of your property on Airbnb. The last thing you want is for them to take their frustrations out on your guests.


Related: Watch List: 20 SA Tech Entrepreneurs Making It Big In The Industry

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How to Guides

(Podcast) Phone Calls Often Solve Email Problems

Irate customers can become your most ardent supporters, but it’s important to treat your clients like people. People like people, and phone calls are more personal than emails.

Nicholas Haralambous

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Emails solve problems – but they also create them. When a real problem arises in your business, is an email the best way to solve it, or should you pick up the phone and give your customer a more personal experience?

Irate customers can become your most ardent supporters, but it’s important to treat your clients like people. People like people, and phone calls are more personal than emails.

Listening time: 3 minutes

Related: (Podcast) Being An Entrepreneur Is Painful

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